Orissa HC: GST Can’t Be Applied to Electricity Transmission and Distribution Costs

The Orissa High Court case ruled that the Goods and Service Tax ( GST ) does not apply to electricity transmission and distribution charges. The writ petition is postponed since die that awaits the adjudication by the Apex court on the special leave petition that is due in the mentioned court, inter alia, against Torrent Power Limited.

On behalf of the petitioner, Riverside Utilities Pvt. Ltd Mr. Jena, the advocate appeared and furnished his client is a distribution company. Impugned is a circular on 1st March 2018 issued via the Government of India, Ministry of Finance (Department of Revenue), Central Board of Excise and Customs. Under challenge is clarification (1) against query (1) in serial no.4 in the circular.

It was then furnished that charges cited in clauses (i) to (v) under clarification (1) are incidental to transmission, that are waived as mentioned by the clarification itself. Therefore the Charges under clauses (i) to (v) would indeed get waived. Under the said clarification the demands have been raised. At this interim phase, there would be an interruption. It is due to the clarification that has been refused by inter alia, the Gujarat High Court, on the ruling of Torrent Power Limited v. Union of India.

It was furnished that the revenue has filed a special leave petition to the Apex court. The direction was there towards the issued notice however no order of stay. Mr Kedia, the standing counsel has appeared on behalf of Revenue furnished that the Revenue has furnished the special leave petition against the refusal of the clarification by inter alia, the Gujarat High Court. With a show cause notice the applicant has just been issued.

The division bench of Justice Arindam Sinha and Justice M.S. Sahoo ruled that we are ready to pass an interim order and adjourn the writ petition sine die awaiting adjudication of the question by the Apex Court. The reason behind this is that the Apex court does not support the denial of the clarification. The refused clarification has given rise to the SCN issuance and acting on the grounds of the clarification, no demand is there.

As SCN was been issued concerning the clarification, which the Gujarat High Court has denied laying on the ruling of the Apex court in Kusum Ingots and Alloys Ltd. v. Union of India, the bench interpreted the refusal of the applicable in this state.

Also Read: What If Electricity Comes Under GST India?

It was carried by the court that impugned SCN on 25th September 2023 and adhered with the demand order on 13th June 2024 will remain stayed. The writ petition is postponed sine die awaiting the adjudication by the Apex court on the Special Leave Petition pending in expressed Court, inter alia, against Torrent Power Limited.